Three UK moves to pounds and pence annual price rises

Three UK has announced they'll be updating their pricing policy to adopt the new pounds and pence-based method on contracts taken out from September 2024.

Mobile contracts will be increasing by £1 to £1.50 per month, while 4G/5G home broadband customers will see rises of £2 per month each April from 2025.

Three UK says their new pricing structure is fairer than other provider's blanket approaches, with smaller data allowances increasing by a smaller cost.

New annual price rises

Three UK contracts taken out or renewed after September 2024 will be subject to a new annual price rise policy based on pounds and pence instead of the previous inflation-linked increases.

Customers will see price rises based on their data allowance, with cheaper plans increasing by smaller amounts:

• 4GB or less: £1 per month
• 5GB to 99GB: £1.25 per month
• 100GB or more: £1.50 per month

In comparison, EE mobile contracts will now be increasing by a flat £1.50 per month, while Vodafone mobile contracts will all only rise by £1 per month.

Three UK's tiered approach is intended to be fairer for customers, and work a little more akin to percentage rises, where lower monthly bills would incur a lower annual price rise. Indeed, having just one rate for all bills does mean those on cheaper deals see a higher proportional increase than those on more expensive plans.

For Three UK home broadband users with 4G or 5G routers, they'll see annual price increases of £2 per month, which is less than the standard £3 increase adopted so far by providers including BT, Plusnet, EE, Vodafone and TalkTalk.

The first annual price rise under the new pounds and pence-based method will come into effect in April 2025, for all new contracts taken out or renewed from September 2024. Customers on existing contracts with Three UK will still see the previous Consumer Price Index (CPI) + 3.9% in April of each year until they recontract.

Elaine Carey, Chief Commercial Officer at Three UK, said, "Like many mobile providers, we regularly review and revise our pricing to ensure that we remain competitive and reflect the cost pressures we face as a business. While we have always made sure annual price changes are clear and transparent to customers, we want to provide greater clarity going forward. Our unique tiered approach means any increase is fair, while ensuring our prices remain competitive."

Mid-contract price hikes

While Ofcom has now ruled to ban inflation-linked mid-contract price rises from January 2025, providers are still allowed to increase prices during the minimum term.

Annual price rises, where specified, must now be given in pounds and pence to enable customers to better understand what they'll be paying, as inflation-linked as well as percentage-based rises have been determined as not transparent enough.

How much this benefits customers overall is debatable however, with a £3 monthly increase on some bills working out more than what the rise would have been under the previous CPI-based model.

Yet providers, including Three UK, have decided to continue justifying mid-contract price hikes as necessary to "support Three's continued investment in its UK network as it navigates rising costs across the business, including staff pay increases and energy costs."

Not every provider is moving so swiftly to pounds and pence-based rises however, with Community Fibre, a London based full fibre network, offering fixed price contracts for those joining by 4th November 2024. Although whether they'll extend this offer remains to be seen, as they also currently use CPI + 2.9% rises.